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iPhone set to debut in Mexico at half its price in the United States |
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Written by E. Eduardo Castillo, THE ASSOCIATED PRESS
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Tuesday, 08 July 2008 |
MEXICO CITY - Apple Inc.'s next generation iPhone lands this week in Mexico as part of its global debut, selling in Latin America's second-largest market for less than half its planned U.S. price.
America Movil will sell the eight-gigabyte 3G iPhone for as little as 773 pesos (US$75) in Mexico for buyers who agree to a two-year, 799-peso (US$77) monthly plan that includes 400 minutes of calls and 200 text messages.
Its 16-gigabyte version, with double the memory, will sell for 1,877 pesos ($US182), according to an announcement by America Movil, Latin America's largest mobile phone service provider, which is owned by Mexican billionaire Carlos Slim.
The price of the phone rises with cheaper monthly plans.
In contrast, AT&T plans to sell the eight-gigabyte model in the U.S. for US$199 and the 16-gigabyte model for US$299. Its cheapest monthly plan will cost US$70 per month, including 450 minutes of calls and unlimited e-mail and Web browsing.
The new iPhone - which has a faster 3G, or third-generation, Internet connection and GPS navigation options - was unveiled by Apple in June and debuts Friday in 22 countries, including the United States, Mexico and Canada.
The rollout signals the latest battlefront in the feud between billionaire Slim's America Movil and Spain's Telefonica - two global telecom giants that have been duelling for control of Latin America's mushrooming market of more than 300 million mobile-phone customers.
The first iPhone debuted in the U.S. last year for US$599. It was sold without a contract, but AT&T would only activate it if subscribers signed on for two years.
But many U.S. phones ended up being "unlocked" from AT&T's network and shipped overseas - including to Latin America, where users enabled them to work on local networks.
Now AT&T is subsidizing the new phone's cost in the United States to draw subscribers into signing two-year deals, hoping to make back the money through monthly service fees. A spokesperson for America Movil in Mexico City declined to confirm whether the company plans to subsidize the phone in Mexico, but its low price suggests that it is.
Multiyear service contracts, common in the United States and Canada, are still rare in Mexico, where 93 per cent of America Movil's 51.5 million mobile-phone customers still buy prepaid phone cards.
"This kind of subscriber isn't looking to increase their costs" upfront, said Raul Ochoa, a telecom analyst with Scotiabank Inverlat in Mexico City.
America Movil has not said whether it will offer a prepaid iPhone option, but could release new details at a press conference Wednesday. In the U.S., a prepaid option was available to buyers of the first iPhone who failed a credit check.
While America Movil will be the first to sell the iPhone in Latin America - adding 15 other countries later this year - rival Telefonica also plans to sell the device in 12 Latin American countries, in addition to Spain, the Czech Republic, Ireland and Britain. Telefonica has not yet announced release dates or pricing details for the region.
The company is also in talks to sell the iPhone in Mexico, said a Telefonica official who declined to be named while negotiations continue.
That would put the two rivals in competition in all of Latin America's biggest markets, including Brazil, Mexico, Argentina, Colombia and Chile.
America Movil is the largest mobile phone service provider in Latin America, with 159 million clients, while Telefonica is second with 104 million.
But in Mexico - where America Movil's affiliate Telmex enjoys an 81 per cent share of fixed-line telephones and its Telcel subsidiary controls about 70 per cent of the mobile-phone market - the battle between the two is especially fierce.
Mexico's Federal Competition Commission opened a probe into Telmex and America Movil in January, after Telefonica complained that Telmex was refusing to connect calls from Telefonica's own fixed-line service, among other things.
Ochoa and other analysts warn that the iPhone's high upfront costs limit both companies' pool of potential subscribers. Yet the fact that both are planning to offer the phone suggests they expect continued gains in disposable income across the region.
America Movil shares rose 0.2 per cent to 26.75 pesos in trading on Mexico's main stock exchange Tuesday.
Apple in June said it had sold about six million iPhones so far this year, and set a goal of 10 million for all of 2008. Many analysts expect sales to be significantly higher.
"The expectations are enormous because it's a very good product," said Martin Lara, a telecom analyst at Vector Casa de Bolsa in Mexico City, who plans to buy an iPhone himself. "Now the point is if those expectations will ultimately be met."
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Last Updated ( Sunday, 07 September 2008 )
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